The relationship between corporate social responsibility (CSR) and firm’s financial performance is well-documented in prior studies, but the impact of CSR on cost of equity is relative rare. Theoretically, firm with CSR tends to have larger investor base and lower perceived risks. The characteristics of less-risky provide firms with an advantageous position of financing, namely, enjoying a lowered risk premium and thus cost of equity. Using industrial companies listed on Taiwan Stock Exchange from 2005 to 2011, we examine whether a firm with CSR tends to have lower cost of equity. Our results show that CSR-firm tends to have lower cost of equity. The evidence supports the positive linkage between CSR and the ease of equity financing, and establish the linkage that a favorable cost of equity is a channel through which financial markets encourage firms to be more socially responsible. The main result does not change among various specification of regression estimation, employing two-stage estimation and separation of full samples into high-tech companies versus non-high-tech ones.